Storage provider Tintri’s IPO filing shows mounting losses

The stock market is doing well and there’s been a strong appetite for tech offerings, so it’s a good time to go public. But Tintri’s mounting losses could prove to be problematic.

Tintri brought in $125.1 million in revenue for its latest fiscal year, but their losses were nearly as big, at negative $105.8 million. Although it’s a better ratio than last year, when revenue was $86 million and losses were $100.1 million. The year before also had losses that exceeded the revenue.

So where is the money going? It looks like “sales and marketing” is Tintri’s biggest expense, which cost the company $108.9 million in the latest year. Tintri also spent $53.4 million on research and development.

In the “risk factors” section of the filing, the company warns it has “‘a history of losses and may not be able to achieve or maintain profitability.” They said the accumulated deficit is $338.7 million. “We anticipate that our operating expenses will increase substantially in the foreseeable future as we continue to hire additional employees, develop our technology and enhance our product and service offerings, expand our sales and marketing teams, make investments in our distribution channels, expand our operations and prepare to become a public reporting company,” said the filing.

They also acknowledge they face “intense competition” from “numerous established companies that sell competitive enterprise cloud infrastructure systems or storage solutions.” Some of the data center competitors listed include EMC, Dell, NetApp, IBM and VMware. Flash storage rivals include Nimble Storage from HP Enterprise, Nutanix and Pure Storage.

Nutanix went public last year and has done moderately well relative to its IPO price, a good sign for Tintri if investors consider them a comparable. But Pure Storage is trading below its 2015 IPO price, a bad sign for the category.

Tintri touts its big customers. They have over 1250 enterprise clients, including 21 of the Fortune 100 companies. Sony Computer, MillerCoors, and The Carlyle Group are some of their notable users.